Republicans Muscle Tax Cut Bill Through House

Washington, D.C. (AP) - Defiant Republicans pushed legislation through the House Tuesday night that would keep alive Social Security payroll tax cuts for some 160 million Americans at President Barack Obama's request - but also would require construction of a Canada-to-Texas oil pipeline that has sparked a White House veto threat.

Passage, on a largely party-line vote of 234-193, sent the measure toward its certain demise in the Democratic-controlled Senate, triggering the final partisan showdown of a remarkably quarrelsome year of divided government.

The legislation "extends the payroll tax relief, extends and reforms unemployment insurance and protects Social Security - without job-killing tax hikes," Republican House Speaker John Boehner declared after the measure had cleared.

Referring to the controversy over the Keystone XL pipeline, he added, "Our bill includes sensible, bipartisan measures to help the private sector create jobs."

On a long day of finger pointing, however, House Democrats accused Republicans of protecting "millionaires and billionaires, `' and Senate Majority Leader Harry Reid, D-Nev., derided the GOP-backed pipeline provision as "ideological candy" for the tea party-set.

After the House vote, the White House urged Congress on in finishing work on extending the tax cuts and jobless aid. Press Secretary Jay Carney issued a statement that didn't mention the pipeline but renewed Obama's insistence that the legislation be paid for, at least in part, by "asking the wealthiest Americans to pay their fair share" in higher tax levies.

Lawmakers "cannot go on vacation before agreeing to prevent a tax hike on 160 million Americans and extending unemployment insurance," he said.

Republicans mocked Obama's objections to their version of the bill.

"Mr. President, we can't wait," said House Majority Leader Eric Cantor of Virginia, employing a refrain the White House often uses to criticize Republicans for failing to take steps to improve an economy struggling to recover from the worst recession in decades.

Voting in favor of the legislation were 224 Republicans and 10 Democrats, while 179 Democrats and 14 Republicans opposed it.

At its core, the measure did include key parts of the jobs program that Obama asked Congress to approve in September.

The Social Security payroll tax cuts approved a year ago to help stimulate the economy would be extended through 2012, avoiding a loss of take-home income for wage-earners. An expiring program of unemployment benefits for the long-term jobless would remain in place, although at reduced levels that the administration said would cut off aid for 3.3 million.

A third major component would avert a threatened 27 percent cut in payments to doctors who treat Medicare patients, a provision Republicans added to appeal to conservatives but one that the White House and Democrats embrace, too.

While the tax and unemployment provisions were less generous than Obama sought, he and Republicans clashed principally over steps to cover the estimated $180 billion cost of the measure, and on the proposed 1,700-mile Keystone XL oil pipeline from Canada through environmentally sensitive terrain in Nebraska to the Texas Gulf Coast.

Obama recently delayed a decision on granting a permit for the pipeline until after the 2012 election.

The payroll tax legislation was one of three major bills that Congress was struggling to finish before adjourning for the year, and by far the most contentious.

A measure covering Pentagon spending was ready for passage, and, separately, negotiators said they were close to a deal on a $1 trillion measure to fund most government agencies through the end of the budget year.

That deal was in limbo, though, with Obama and congressional Democrats using it as leverage to keep House Republicans at the table negotiating a final compromise on the tax and unemployment measure.

It was the final showdown of a year that once brought the government to the brink of a shutdown and also pushed the Treasury to the cusp of a first-ever default.

Those confrontations produced last-minute compromises.

This time, leaders in both parties stressed a desire to renew the unemployment tax cuts and jobless benefits that are at the core of Obama's jobs program.

Obama and most Democrats favor an income surtax on million-dollar earners to pay for extending the Social Security tax cut, but Republicans oppose that, saying it is a violation of their pledge not to raise taxes.

Instead, the House bill called for a one-year pay freeze and higher pension costs for federal workers, higher Medicare costs for seniors over $80,000 in income as well as other items to cover the cost.

Obama's veto message focused on economic issues - which unite Democrats - accusing Republicans of putting the burden of paying for the legislation on working families "while giving a free pass to the wealthiest and to big corporations by protecting their loopholes and subsidies."

Republicans drew attention at every turn to the pipeline, which is backed by some lawmakers in the president's party as well as by the blue-collar unions representing plumbers, pipefitters, electricians, carpenters and construction workers.

Estimates of the jobs that would be produced by pipeline construction vary widely but are in the thousands in a time of high national unemployment. The State Department estimated the total at about 6,000; project manager TransCanada put it at 20,000 directly, and Rep. Dave Camp, R-Mich., said in debate on the House floor it was more than 100,000.

Democrats aimed their criticism at the bill's impact on those who would bear the cost.

The bill also "spends $300 million on a special interest provision that helps a handful of specialty hospitals while cutting billions from community hospitals," he said, referring to a part of the measure that will raise federal Medicare payments to doctor-owned hospitals.

Rep. Eliot Engel, a New York Democrat, said he had an open mind about the pipeline but also said it had no legitimate role in the payroll tax bill.

Republicans argued otherwise.

Rep. Fred Upton of Michigan, the chairman of the House Energy and Commerce Committee, said the pipeline's construction would allow Canada to send one million barrels of oil a day into the United States, lessening domestic reliance on imports.

He said Canadian development of a pipeline is a certainty, and lawmakers needed to decide whether they wanted it to end up in the United States or "someplace like China."

As drafted by Republicans, the measure also would block the Environmental Protection Agency from issuing planned rules to limit toxic emissions from industrial boilers. Republicans said the regulation would be a job killer, and 41 Democrats supported an earlier stand-alone measure to prevent the administration from acting.

Other provisions to cover the cost of the legislation would repeal billions from the health care bill that Obama won from Congress last year when both the House and Senate were under Democratic control and from boosting fees that Fannie Mae and Freddie Mac charge banks for backing their mortgages.

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